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Geographical Proximity and the Transmission of Tacit Knowledge

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  • Desrochers, Pierre
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    Abstract

    Since at least the publication of Pigou's "The Economics of Welfare" (Pigou 1932) and Arrow's seminal article on "Economic Welfare and the Allocation of Resources of Invention" (Arrow 1962), most economic theorists have argued that "knowledge is expensive to produce but cheap to reproduce." Following Hayek (1948) and Polanyi (1958), scholars working in the tradition of Austrian economists have dissented from that view by pointing out that if a good deal of knowledge, such as the price of gold, can be easily codified and transmitted. Much important knowledge is tacit and dependent on the "particular circumstances of time and place:" One line of work that supports the Austrian view can be found in economic geography and neighboring disciplines where the geographic concentration of economic activity is explained, among other factors, by the importance of geographical proximity between individuals in the transmission of tacit knowledge. This paper therefore argues that the spatial agglomeration of economic activities constitutes a powerful vindication of Austrian insights. Copyright 2001 by Kluwer Academic Publishers

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    Bibliographic Info

    Article provided by Springer in its journal Review of Austrian Economics.

    Volume (Year): 14 (2001)
    Issue (Month): 1 (March)
    Pages: 25-46

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    Handle: RePEc:kap:revaec:v:14:y:2001:i:1:p:25-46

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    Web page: http://www.springerlink.com/link.asp?id=100335

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    Cited by:
    1. Yuan-Chieh Chang & Ming-Huei Chen & Yuan-Po Lin & Yu-Shiang Gao, 2012. "Measuring Regional Innovation and Entrepreneurship Capabilities," Journal of the Knowledge Economy, Springer, vol. 3(2), pages 90-108, June.
    2. Philippe Béraud, 2002. "L'innovation comme "concrétisation de l'objet technique" : Quelle est la fonction de l'entrepreneur technologue ?," Innovations, De Boeck Université, vol. 16(2), pages 51-70.
    3. Nishimura, Junichi & Okamuro, Hiroyuki, 2012. "Subsidy and networking: The effects of direct and indirect support programs of the cluster policy," Working Paper Series 22, Center for Interfirm Network, Institute of Economic Research, Hitotsubashi University.
    4. Okamuro, Hiroyuki & Nishimura, Junichi, 2011. "Management of Cluster Policies: Case Studies of Japanese, German, and French Bio-clusters," CEI Working Paper Series 2011-7, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    5. Randall Holcombe, 2008. "Advancing economic analysis beyond the equilibrium framework," The Review of Austrian Economics, Springer, vol. 21(4), pages 225-249, December.
    6. Negin Salimi & Rudi Bekkers & Koen Frenken, 2013. "Governance Mode Choice in Collaborative PhD Projects," Working Papers 13-09, Eindhoven Center for Innovation Studies, revised Oct 2013.
    7. Triyakshana Seshadri & Virgil Storr, 2010. "Knowledge problems associated with creating export zones," The Review of Austrian Economics, Springer, vol. 23(4), pages 347-366, December.

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